Innovating for the healthcare needs
of today and tomorrow
Q1 presentation 12 May 2015
Reduce healthcare cost
Our Mission
Reduce the use of antibiotics
To prevent device related healthcare associated infections
Prevent spread of multi-resistant bacteria
2
Save lives
Healthcare associated infections –
the most frequent adverse event in health care
Source: WHO/Patient Safety/Report on the Burden of Endemic Healthcare associated infection worldwide, 1995 - 2010
*Sweden 9% Belgium 6.9%
*The Swedish National Board of Health and Welfare/Report on Healthcare/Healthcare associated infections, 2014
United Kingdom 9%
France 4.4%
Germany 3.6%
Italy 6.7%
Spain 8.1% Switzerland 8.8%
Netherlands 7.2%
New Zeeland 12%
Canada 11.6%
Brazil 14%
Tanzania 15%
Turkey 12.5%
Prevalence of healthcare associated infections
Iran 8.8%
USA 4.5%
Deaths attributable to AMR
4
Compared to other major causes of death
The global health scare
”Ten million people at risk if
antimicrobial resistance is
not tackled”
”The spread of AMR is
expected to reduce global
GDP by 2 – 3.5 percent”
Source:
Review on Antimicrobial Resistance (AMR),
Tackling drug-resistant infections globally,
December 2014 (O’Neil report)
Targets the most common HAIs
Bactiguard Infection Protection
BIP Foley
BIP ETT
BIP CVC
Occurrence of HAI US (all hospital types)
32%
14%
15%
22%
17%
Urinary tract
Blood stream
Respiratory tract
Surgical
site
Other
...explaining the rationale behind the products in
the Bactiguard portfolio
5
Medical devices, for example catheters,
are accountable for approx. 50 - 60% of
HAI cases
70% of the bacteria that cause HAI
are resistant to at least one relevant
antibiotic
Initial reflections
6
Opportunities
• Healthcare associated infections a major challenge across the world
• Antibiotic resistance a growing threat to public health
• There is an increasing need for prevention
• Proven and effective technology, competent employees and satisfied customers
Challenges and actions
• Market access/product approval in key growth markets time consuming, unpredictable and expensive
• Sales & Marketing: Focus efforts and invest more to generate sales.
• Complex business - standardize and improve processes to increase efficiency
• Finalize transfer of production and headquarters
• Complement and strengthen clinical evidence
• Complement product portfolio and develop new license businesses
First quarter performance
7
• Q1 weaker than in 2014
• Stable license business with C.R. Bard in the US
• Lower deliveries of BIP portfolio, no territorial fees
• Market expansion in Europe (Switzerland)
• More Swedish hospitals start ordering our products and plan trials
• Changed market strategy for Russia and India affected results due
to reservations of 23.5 MSEK for doubtful receivables
Highlights Financial overview
First quarter (Jan-Mar 2015)
• Revenues of MSEK 28.8 (34.5),
minus 16% compared to 2014
(no Territorial fees in Q1 2015, compared
to 11.6 MSEK in 2014)
• EBITDA of MSEK -26.8 (9.8),
First quarter adjusted (Jan-Mar 2015)
• Excluding provision for doubtful
accounts receivables and non-recurring
costs of MSEK 28.8, EBITDA adjusted of
MSEK 2.0 (9.8), and a margin of 7%
(28%)
8
Supplied products Financial overview
• 4 650 BIP products supplied in Q1
2015 compared to approximately
16 000 during Q1 2014.
• For the full year 2014, 79 000 BIP
products were supplied
9
Revenue streams Financial overview
From a product perspective Bactiguard has two lines of business; Licenses and the BIP portfolio,
acknowledged in the accounts as three revenue streams
Three revenue streams in the income statement
BIP CVC BIP ETT
BIP portfolio License
BIP Foley Bard license deal
(sales since 1995)
Territorial fee BIP revenue License
3 1 2
10
Income distribution Financial overview
11
Jan-Mar Jan-Mar Full year
2015 2014 2014
License revenues 26,8 22,5 89,8
Territorial fees - 11,6 17,1
Sales of BIP products 0,1 0,1 2,2
Other revenue 1,9 0,3 9,8
Total Revenues 28,8 34,5 118,9
MSEK
Key figures Financial overview
• EBITDA (Q1) MSEK -26.8
• Adjusted EBITDA, MSEK 2.0,
7% margin
• Net profit (Q1), MSEK -30.6,
negatively affected by non-
recurring items.
• Adjusted net profit, MSEK -8.7
• Total cash flow for the period,
MSEK -13,8 including cash
flow from investing activities of
MSEK -2.3 and repurchase of
bonds of MSEK -5.2
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Jan-Mar Jan-Mar Full year
2015 2014 2014
Revenues, SEKm 28,8 34,5 118,9
EBITDA*, SEKm -26,8 9,8 13,3
EBITDA margin*, % -93% 29% 11%
Operating profit, SEKm -34,9 2,4 -19,8
Net profit for the period, SEKm -30,6 -19,6 -95,0
Operating cash flow**, SEKm -8,7 17,7 -54,0
Total cash flow, SEKm -13,8 17,6 98,0
Key figures
*EBITDA Full year 2014 adjusted for IPO costs
**Cash flow from operating activities after investments and changes in working capital
MSEK Q1 2015 Q1 2014
EBITDA -26,8 9,8
Provision for doubtful accounts 23,5
Non-recurring costs 5,3
Adjusted EBITDA 2,0 9,8
MSEK Q1 2015 Q1 2014
Net profit -30,6 -19,6
Non-recurring items 28,8
Market valuation bond -6,9 9,0
Adjusted Net profit -8,7 -10,6
Financial flexibility and strength Financial overview
Share issue of MSEK 20 in April
Set off issue of MSEK 222.5 in June
Share issue of MSEK 240 in connection with IPO
• Equity ratio of 64 %
• Net debt of MSEK 91.6
• Cash position of MSEK 91.9
• Nominal value outstanding bond MSEK 183.5
• Annual interest costs on bond going forward MSEK 20
(compared to MSEK 50 prior to IPO)
• Repurchase of bonds, nominal value MSEK 18.5
Q2 -14
Q3 -14
31 March
13
• Repurchase of bonds, nominal value MSEK 20.5 Q4 -14
• Repurchase of bonds, nominal value MSEK 5 Q1 -15
Initial reflections
14
Opportunities
• Healthcare associated infections a major challenge across the world
• Antibiotic resistance a growing threat to public health
• There is an increasing need for prevention
• Proven and effective technology, competent employees and satisfied customers
Challenges and actions
• Market access/product approval in key growth markets time consuming, unpredictable and expensive
• Sales & Marketing: Focus efforts and invest more to generate sales.
• Complex business - standardize and improve processes to increase efficiency
• Finalize transfer of production and headquarters
• Complement and strengthen clinical evidence
• Complement product portfolio and develop new license businesses
Focus sales efforts where we currently have market
access, while creating additional access for the future
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Focusing sales and marketing efforts on hospital departments
and patient groups with largest need for our products
Patient group
Share of patients
using Foley
# of catheter
days
Critically ill 74% 7
Stroke / CVA 44% 19
Dementia 25% 25
Prostate cancer 27% 13
Bladder cancer 21% 13
BPH/TURP 23% 17
Spinal cord injury 25% 24
Source: Survey of US physicians, Socialstyrelsen DRG-database 2013, SKL point-prevalence of Foley usage 2013, Swedish intensive care registry
Health economic value creation of Bactiguard product modeled per prioritized patient group
- Health care economics approach
Description
Savings per patient due to reduced urinary tract infection rate from using Bactiguard
1
2
Cost of sCAUTI* and urosepsis treatment net additional reimbursement
sCAUTI and urosepsis reduction rate for target population, driven by length of catheterization and risks
Expected sCAUTI and urosepsis risk for patient group using standard Foley catheters
Incidence Cost of treatment
Reduction rate X
1 2
X
3
3
EV
Economic value
0
=
Premium price spent per patient to use Bactiguard
Foley usage Price diff. X
4 5
4
5
Avg. # Foley catheters used per patient over treatment cycle
Price difference per unit (Bactiguard - standard catheter)
0 The benefit per patient of using a Bactiguard coated Foley
Conservative HE estimate based on treatment costs, additional stakeholder benefits not modeled
* Symptomatic catheter associated urinary tract infections
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• Strengthen clinical evidence by conducting specific complementary studies
• Using Lean methodologies, implement standardized processes and reduce complexity throughout the company
• Finalize the transfer of production and headquarters an important aspect of the process improvements
• In the mid-term, complement our product portfolio to address more customers
• Allocate resources to develop new license businesses
Expand business and reduce complexity
The start up of the production is ongoing
December 2014 May 2015 June August September
BIP CVC
validation
HQ transfer CE audit
BIP ETT
validation,
inventory
transfer
Production
start
July
Investing in Bactiguard is investing in the future
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• Healthcare associated infections and antibiotic resistance - two of the greatest
challenges of our time
• Prevention is key - Bactiguard has efficient, safe and well proven solutions
• We will concentrate efforts and resources on fewer markets
• Short term market potential greatest in the Middle East
• Longer term India, China, Brazil and Mexico markets with considerable
potential. Build up recurring, stable volumes in Europe
• Strengthening the sales team in the Middle East, Latin America & Europe
• Obtaining product approval in China and effective sales channels in India
• Focusing sales efforts on the right target groups within the hospitals
• Road map to strengthen clinical evidence
• Implement standardized processes to reduce complexity
• Allocate resources to new license businesses
Well positioned for growth
For more information
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Please visit our website: www.bactiguard.com
For questions and additional information, please contact:
Niels Christiansen, CEO: +46 8 440 58 78 [email protected]
Fredrik Järrsten, CFO: +46 725 500 089 [email protected]
Cecilia Edström, Acting Director of Sales, Marketing and Communications:+46 722 262 328 [email protected]